How to Begin Investing in Stocks

List: Posted: 04/13/16

When planning your portfolio, one of the most common of the vehicles (options) used will be stocks. This is not only because they are readily and widely available, but also because they are extremely flexible and can be used in a variety of ways, making them ideal for the beginner.

Consider that investing might need to be extremely low risk, or depending on the type of investing, it can be a huge amount of risk over the life of your portfolio. Why would investing need to be done in a variety of risk levels? An individual portfolio is made up of things like stocks, commodities, bonds, and other assets. Each of these investing options is going to be done in a way to balance the overall performance.

This is the reason that stocks are such a great option for investing plans. Consider that penny stocks are low in price (priced at under one dollar each), high in risk, but capable of generating a huge amount of income if the company you are investing in succeeds. They are not going to be the basis for the complete investing plan, as if the company you've invested in does badly or goes bankrupt, you lose all your money. However, penny stocks can be used to boost the value of your portfolio rapidly should the company do well or perform much better than expected.

If Penny Stocks are considered short term investments, then regular stocks fall under the “growth” category and can be put to use as a form of long-term investing.

When using stocks as a major element of an investing program, it is a generally wise idea to work with a brokerage offering the best fees and largest array of services, including free advice and tips for good stock selections. Good luck!

Learn more about investing with stocks and how to use them to enhance or build the individual portfolio.

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